New Delhi : Reduction in import duty on cotton has failed to curb cotton prices as the exemption period was not long enough, a government official told Mint, adding that the ongoing sowing season for cotton played a key role in the decision making.
With cotton prices at record levels, the domestic textile industry is facing severe disruption due to rising costs. Many units in the country are operating with little or no margin as manufacturers are finding it difficult to pass on the costs to the customers.
“The cut in import duty on cotton did not have the desired effect. The relaxation period should have been longer to cool the prices as it takes around three months to import cotton and traders would not benefit from the short-term discount.
“As the cotton sowing season was underway, the agriculture ministry did not want farmers’ sentiments to be affected and opposed the relaxation after September,” the official said.
However, the government may impose a complete ban on export of cotton as a last resort to curb the prices. cotton price per candy has exceeded 1 lakh, almost double 45,000 a year ago.
Tamil Nadu Chief Minister MK Stalin on Monday wrote to Prime Minister Narendra Modi expressing concern over rising cotton prices. Stalin, in a social media post, said the price hike has had a negative impact on the state where the textile industry is a major employer. “Continuous increase in the prices of cotton and yarn has cascading implications for the textile industry in TN which is traditionally an employment generator. I request you to take this situation seriously and check the rise in prices.”